Where to park $600k for a while

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Dee Snider

Norm Smith Medallist
Jul 17, 2006
7,870
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Have sold up the house and will be renting for anywhere between 12 and 24 months. WE have no debts and already a nice share portfolio. Question is what to do with $600k? The way I see it, no matter what I do, I am going to get shafted tax wise. Any thoughts guys?
 

Lyyynnnchy

Norm Smith Medallist
Oct 10, 2007
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Have sold up the house and will be renting for anywhere between 12 and 24 months. WE have no debts and already a nice share portfolio. Question is what to do with $600k? The way I see it, no matter what I do, I am going to get shafted tax wise. Any thoughts guys?
Do you own any other property?
 

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Lyyynnnchy

Norm Smith Medallist
Oct 10, 2007
9,890
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It also depends what your goals are. Are you looking to invest the $600,000 in something that will cost you minimal tax or simply "park" it somewhere it's not going to cost you anything in tax?
 

Dee Snider

Norm Smith Medallist
Jul 17, 2006
7,870
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Burning in Hell
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Collingwood
Nope do not own any other property and my aims are really just to park it somewhere where it might earn something until I need it again - which could be anywhere betwen 12 and 24 months really. Not trying to avoid tax per se but ultimatley if it earns anything I guess the tax will follow...
 
May 29, 2008
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Have sold up the house and will be renting for anywhere between 12 and 24 months. WE have no debts and already a nice share portfolio. Question is what to do with $600k? The way I see it, no matter what I do, I am going to get shafted tax wise. Any thoughts guys?

Depends how old you are and what you intend to do at the end of the 12/24 months.

If you are older you should consider investing all or some of it which will not be taxable when you realise the assets at retirement age.

Eg shares where you re-invest the dividends or use the franked credits.
 

Oraaaaazio

Club Legend
Jun 23, 2014
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Depends how old you are and what you intend to do at the end of the 12/24 months.

If you are older you should consider investing all or some of it which will not be taxable when you realise the assets at retirement age.

Eg shares where you re-invest the dividends or use the franked credits.
this is why you don't take financial/tax advice from internet forums
 
May 29, 2008
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this is why you don't take financial/tax advice from internet forums

OPTION A: Why can't he start a SMSF (if he doesnt have one already), make the maximum annual concessional contributions and purchase the assets within the SMSF and then sell the assets when he is over 65 which will not attract CGT or Income Tax?

OR

OPTION B: Why can't he start a SMSF (if he doesnt have one already) and make annual in specie contributions (transfer the assets to his SMSF) and then sell the assets when he is over 65 which will not attract CGT or Income Tax?
 

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what is a fully secured property bond?

generally on smaller developments with a total cost of $500k to $2.5m.

You would want to find a group that you can trust but a good metric would be something like:

Capex of project $500k
Sales Revenue of project $670k

This is usually funded by $350k in equity and the balance of $150k is funded by in bonds. Usually the bonds are in $50k blocks in syndication, meaning your risk can be mitigated again by spreading across a few projects.

The total yield on the bond is usually 10% with first ranking security over the land. Meaning if the project goes awry you get you capital and interest back before the equity.

So if a project takes 9 months, the funds are called in stages thus the investment is usually only 6 months. This of course could be repaid or rolled over into the next project.

I play, as an investor, in both the big end of property and the small as a side venture to my main business. The big end of property is what I would describe as a going concern with lower returns but the small end is ad hoc but the returns are greater. What I like about the smaller end is it is targeting an entry level into the market which is a much needed sector in the market and the final product is in demand as it still has a focus on quality.


Lastly I like 10% yields as in the case you get 5%, 2% will be eaten by inflation and 2% will be eaten by tax leaving you with only 1%. A 10% return by comparison would still lose 2% in inflation and 4% in tax but leaving you 4% ahead.

Obviously seek your own financial advice.
 
Sep 28, 2007
4,224
1,834
T90
AFL Club
Essendon
generally on smaller developments with a total cost of $500k to $2.5m.

You would want to find a group that you can trust but a good metric would be something like:

Capex of project $500k
Sales Revenue of project $670k

This is usually funded by $350k in equity and the balance of $150k is funded by in bonds. Usually the bonds are in $50k blocks in syndication, meaning your risk can be mitigated again by spreading across a few projects.

The total yield on the bond is usually 10% with first ranking security over the land. Meaning if the project goes awry you get you capital and interest back before the equity.

So if a project takes 9 months, the funds are called in stages thus the investment is usually only 6 months. This of course could be repaid or rolled over into the next project.

I play, as an investor, in both the big end of property and the small as a side venture to my main business. The big end of property is what I would describe as a going concern with lower returns but the small end is ad hoc but the returns are greater. What I like about the smaller end is it is targeting an entry level into the market which is a much needed sector in the market and the final product is in demand as it still has a focus on quality.


Lastly I like 10% yields as in the case you get 5%, 2% will be eaten by inflation and 2% will be eaten by tax leaving you with only 1%. A 10% return by comparison would still lose 2% in inflation and 4% in tax but leaving you 4% ahead.

Obviously seek your own financial advice.
What area do you work in PR?
 
What area do you work in PR?

I am semi-retired now but own a business providing traditional merchant banking services to the resource sector and through that a own number of mining interest locally and internationally.

We were once the largest listed resource investment business in Oz but we're now domiciled OS and are private.
 
What area do you work in PR?

despite being focused on resources, we invest in all sorts of things especially if it is helping smaller businesses or energetic young people
- IT
- Property
- Agriculture
- Manufacturing

are areas that I have backed recently.
 
Sep 28, 2007
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I am semi-retired now but own a business providing traditional merchant banking services to the resource sector and through that a own number of mining interest locally and internationally.

We were once the largest listed resource investment business in Oz but we're now domiciled OS and are private.
We're in the same field then, although I'm only new to it.
 
We're in the same field then, although I'm only new to it.

This year and probably next will remain tough but it is actually these years where you get set.

Good luck. but remember one simple rule; average managers ruin good assets but good manager make average assets work. So look at the people more than the asset.
 
Sep 28, 2007
4,224
1,834
T90
AFL Club
Essendon
This year and probably next will remain tough but it is actually these years where you get set.

Good luck. but remember one simple rule; average managers ruin good assets but good manager make average assets work. So look at the people more than the asset.
We are a classic corporate advisory/merchant bank dealing with capital raisings, IPO's etc. Nothing in mining or bio space though.

Time to list again!
 
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